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Estate Planning, Asset Protection, and Long-Term Care

A lot of people who come to an estate planning lawyer are worried about the possibility that they will have to spend a lot of money on long-term care. While not everyone needs to spend time in a long-term care facility, such as a nursing home, a lot of people do. Because the costs of such care can easily exceed $70,000 a year, the question of how you will pay for it becomes a significant concern. Not only that, but the worry that you will have to sell all your property because you or your spouse require such care is not something you should ignore.

When it comes to planning ahead for long-term care, questions of estate planning and asset protection are closely intertwined. Here are some essential questions you and your estate planning attorney will have to talk about if you are worried about these types of issues.

How much will I have to pay if I have to go to a nursing home?

That depends, but the average cost of a nursing home can exceed $70,000 a year. If you and your spouse require such care, and do so for several years or more, it’s possible you could spend hundreds of thousands of dollars on long-term care costs.

Can I use Medicare to pay?

Only under very limited circumstances. Medicare will pay for short stays in a rehabilitation or nursing home facility if the stay is connected to hospitalization. Otherwise, long-term care costs are not covered under Medicare.

Will I have to sell my property to pay for long-term care?

Possibly. If you don’t have an asset protection plan in place, your long-term care costs could quickly deplete your savings. If you have significant assets, you may have to begin liquidating those assets in order to pay for the long-term care bills. If you don’t pay, the long-term care provider could sue you to recover the unpaid costs.

What if I have a living trust?

Living trusts won’t do anything to protect your assets from creditors. Whether it’s medical expenses, personal liability lawsuits, or any other creditor, assets you have in the name of the revocable living trust are not protected. Your trust will allow your estate to avoid probate, but it doesn’t provide asset protection.

So what are my asset protection options?

That depends on a number of factors. With the proper asset protection plan in place, it’s possible for you to not only protect your property from creditors, but you might also be able to qualify for Medicaid. Unlike Medicare, Medicaid will pay for long-term care, but only if you can meet the asset limit requirements. You’ll need to talk your lawyer for more information.

You can learn a lot more about asset protection and other estate planning topics by attending an upcoming free seminar. Visit the seminars page for details and registration information.

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